As of October 20, 2023, Dominicans had RD$71,049.9 million more to mobilize in the market, either in their accounts through bank transfers or in their hands, compared to the exact date of the previous year, because the monetary aggregate known as the Circulating Medium (M1) went from RD$66,766.5 million to RD$77,816.6 million.
The M1 is the most liquid mechanism of the use of money since it is the money that people have in their hands or forms of payment through transfers or checks and checking accounts.
The figures published by the Central Bank, however, show that the way of moving money in the economy has changed with the technological advances that allow the availability of monetary resources for quick transfers.
The money in the hands of the people decreased between September and October this year by RD$1,059.71 million, as well as the bills and coins. Still, the transferable deposits in national currency grew by RD$3,765.5 million, which means that liquid money can be mobilized because it is available.
In addition, in general, money, in a broad sense, grew by RD$1,952.4 million in October of this year.
The money that moves an economy is identified with the letter M, and the numbers 1 to 3 are added as the monetary mass grows. For example, M2, known as expanded money supply, includes M1 and other deposits in national currency, as well as securities issued by OSD (Other Depository Corporations), generally financial institutions, and by the Central Bank.
M3 or broad money includes the expanded money supply (M2) and other deposits and securities issued in foreign currency.
In his most recent activity, on the occasion of the 76th anniversary of the Central Bank, the governor of the monetary institution, Héctor Valdez Albizu, indicated that as a result of liquidity facility measures of rapid placement in households and productive sectors, RD$126,000 million were channeled to consumption, commerce, MSMEs, housing, construction, manufacturing, agriculture, and others.
In addition, in October, the Monetary Board ordered a new rapid liquidity facility for RD$40 billion to the construction, manufacturing, export, and agricultural sectors, of which, as of October 19, the financial system had channeled some RD$13.735 billion.
He assured that as a result of these measures, in September, there were already expansions in the monetary aggregates, “specifically the circulating medium M1, which registered an inter-annual growth of 11.2% in September”.
He stressed that the expanded money supply M2, which includes longer-term deposits, grew by 17 %, while broad money, M3, which encompasses M2 and other foreign currency deposits, expanded by 14. 6 % in September of this year, 2023.